WORLD WHEAT SITUATION AND OUTLOOK
By early August, U.S. wheat prices had fallen $10/ton lower than mid-July. Prices were pressured as harvest continued to move into the Northern Plains and by sluggish import demand. Export quotes for #2 HRW FOB Gulf are about $114/ton for nearby shipment compared to $150 this time last year. World wheat trade in 1998/99 stands at 98.8 million tons, 1 million tons higher than last months estimate. Global stocks are down 6 million tons from last month, with the 8 million ton reduction in China slightly offset by the rise in stocks in several exporting countries (Australia and European Union). Global consumption is expected to be slightly higher, while the stocks-to-use ratio is lower at 20.7 percent.
The 1998/99 wheat export forecast for the United States is raised by 1.5 million tons (30.5 million tons) due to the recent announcement that USDA will purchase surplus wheat for donations to needy countries.
Larger production prospects in Australia suggest raising the 1998/99 wheat export forecast by 500,000 tons. Exports are forecast at 15.5 million tons.
The wheat export forecast for Kazakhstan in 1998/99 is lowered 500,000 (to 2.8 million tons) due to a reduction in production prospects.
Wheat exports by Eastern Europe are projected 300,000 tons lower based on smaller production prospects. Exports are expected to reach 1.9 million tons, which is 350,000 tons below last years level.
1998/99 wheat imports by Indonesia are forecast 500,000 tons lower this month in anticipation of BULOG (state buying agency) eliminating the flour subsidy, which reduces the price of flour by 40 percent. Lower demand coupled with 500,000 tons of U.S. donations will anchor imports at a projected 3.5 million tons.
Higher wheat production prospects in Brazil suggest a 300,000 ton reduction in the 1998/99 import forecast. Imports are projected at 5.9 million tons, and remain slightly higher than last years level.
Wheat import forecasts for Morocco, and Tunisia in 1998/99 are lowered by 100,000 tons each (1.5 million tons, and 900,000 tons respectively) based on higher production prospects
1998/99 wheat import forecast for South Africa is raised this month by 200,000 tons, to 700,000 tons on lower production.
Uzbekistans wheat imports are expected to be 600,000 tons lower this month (400,000 tons) on larger-than-expected production prospects.
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